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Dublin: 12 °C Wednesday 22 October, 2014

Facebook reports lower 1Q net income as IPO nears

Facebook Inc has reported its first quarter-to-quarter revenue dip in at least two years – just weeks ahead of the date of its first public offering May.

FACEBOOK REPORTED ITS first quarter-to-quarter revenue dip in at least two years – just weeks ahead of the date of its first public offering May – raising concerns that the social network’s growth may be slowing.

According to a regulatory filing, Facebook Inc’s net income fell 12 per cent to $205 million in the first three months of this year, from $233 one year earlier. Meanwhile, net income attributable to common shareholders fell to $137 million from $153 million.

However, the company said its revenue rose 45 per cent to $1.06 billion.

The company blamed the slowdown on seasonal advertising trends, Reuters reported. “No matter how you slice it, for a company that is perceived as growing so rapidly, to slow so much on whatever basis – sequentially or annually – it will be somewhat concerning to investors if faced with a lofty valuation,” Brian Wieser, an analyst with Pivotal Research Group told the news agency.

Analyst Jeff Sica, chief investment officer of SICA Wealth Management, added that while investors were still likely to be keen to sign up for the IPO , they might be less keen to keep the stock over a long period.

Facebook Inc says it had 901 million monthly active users as of March 31 – a rise from 845 million at the end of last year.

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